Synthetic Carried


In certain circumstances a GP may be out of carried interest on a particular fund, and as a result, get compensated for the value creation it may achieve for the remaining of the fund life, which creates a misalignment of interests between the GP and their LPs.
Through a structured secondary transaction, a new carried interest mechanism is replicated, renegotiating high water mark of the carried, and therefore, re-incentivizing the GP, and recreating an alignment of interests with LPs.